Scottish Provident is to continue offering a choice of guaranteed and renewable rates for critical ...
Scottish Provident is to continue offering a choice of guaranteed and renewable rates for critical illness (CI) policies into 2003 and beyond. However, the price differentiation between the two rates is set to widen.
The news follows months of market speculation that insurers will be forced to abandon guaranteed CI rates in the new year because of Swiss Re's decision to pull out of the market.
Nick Kirwan, head of product development at Scottish Provident, said: 'What advisers will see is more of a gap between the guaranteed rates and renewable rates. For an average case at the moment, the difference is likely to be a matter of pence, so most of our business at the moment is on guaranteed rates. However, going forward, the difference will perhaps be £4 to £5, and people will be faced with a choice.'
The provider has also made a limited amount of changes to its CI definitions, applicable from 13 December.
Less advanced rates of prostate cancer will no longer be covered, nor will keyhole heart surgery.
Both alterations are in line with new definitions from the Association of British Insurers. Alzheimer's disease and dementia will now be covered from when it affects lifestyle, with no age restrictions.
Charles Ansdell, corporate relations manager at IFAs Inter Alliance, said the move should not affect sales.
He said: 'If a product satisfies our clients' interests by charging a bit more for the guarantee yet offers better long-term prospects, it is an option we would gladly consider.'
The provider will honour quotes given before 12 December 2002, provided the corresponding paperwork is received before 10 January 2003.
The plan must start within four months of the completion of the underwriting process, and issue of an acceptance letter in order to receive the pre-13 December 2002 rates and conditions.
